Abstract
This paper empirically investigates the monetary impact of banking crises in Chile, Colombia, Denmark, Japan, Kenya, Malaysia, and Uruguay during 1975–98. Cointegration analysis and error correction modeling are used to research two issues: (i) whether money demand stability is threatened by banking crises; and (ii) whether crises lead to structural breaks in the relation between monetary indicators and prices. Overall, no systematic evidence that banking crises cause money demand instability is found. The paper also analyzes inflation targeting in the context of the IMF-supported adjustment programs.
Volume 49 (2002) comprises three issues, as follows
No. 1, 1–153
No. 2, 155–266
No. 3, 267–507
Authors
Blejer, Mario I., Alfredo M. Leone, Pau Rabanal, and Gerd Schwartz. Inflation Targeting in the Context of IMF-Supported Adjustment Programs 313
Cashin, Paul, and C. John McDermott. The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability 175
Cerra, Valerie, and Sweta Chaman Saxena. What Caused the 1991 Currency Crisis in India? 395
Chami, Ralph, and Connel Fullenkamp. The Optimal Subsidy to Private Transfers Under Moral Hazard 242
Choi, Woon Gyu. The Inverted Fisher Hypothesis: Inflation Forecastability and Asset Substitution 212
Chong, Alberto, and Luisa Zanforlin. Technology and Epidemics 426
Dayal-Gulati, Anuradha, and Aasim M. Husain. Centripetal Forces in China’s Economic Takeoff 364
Diebold, Francis X. Symposium on Forecasting Performance: An Introduction 1
Dolinskaya, Irina. Explaining Russia’s Output Collapse 155
Flood, Robert P., and Andrew K. Rose. Uncovered Interest Parity in Crisis 252
Fullenkamp, Connel, and Ralph Chami. The Optimal Subsidy to Private Transfers Under Moral Hazard 242
Gallo, Giampiero M., Clive W.J. Granger, and Yongil Jeon. Copycats and Common Swings: The Impact of the Use of Forecasts in Information Sets 4
Granger, Clive W.J., Giampiero M. Gallo, and Yongil Jeon. Copycats and Common Swings: The Impact of the Use of Forecasts in Information Sets 4
Heijdra, Ben J., and Jenny E. Ligthart. Tax Policy, the Macroeconomy, and Intergenerational Distribution 106
Husain, Aasim M., and Anuradha Dayal-Gulati. Centripetal Forces in China’s Economic Takeoff 364
Jeon, Yongil, Giampiero M. Gallo, and Clive W.J. Granger. Copycats and Common Swings: The Impact of the Use of Forecasts in Information Sets 4
Juhn, Grace, and Prakash Loungani. Further Cross-Country Evidence on the Accuracy of the Private Sector’s Output Forecasts 49
Lehmann, Alexander. The Distribution of Fixed Capital in the Multinational Firm 136
Leone, Alfredo M., Mario I. Blejer, Pau Rabanal, and Gerd Schwartz. Inflation Targeting in the Context of IMF-Supported Adjustment Programs 313
Ligthart, Jenny E., and Ben J. Heijdra. Tax Policy, the Macroeconomy, and Intergenerational Distribution 106
Loungani, Prakash, and Grace Juhn. Further Cross-Country Evidence on the Accuracy of the Private Sector’s Output Forecasts 49
Martinez Peria, Maria Soledad. The Impact of Banking Crises on Money Demand and Price Stability 267
McDermott, C. John, and Paul Cashin. The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability 175
Musso, Alberto, and Steven Phillips. Comparing Projections and Outcomes of IMF-Supported Programs 22
Phillips, Steven, and Alberto Mussa. Comparing Projections and Outcomes of IMF-Supported Programs 22
Prasad, Eswar S. Wage Inequality in the United Kingdom, 1975–99 339
Rabanal, Pau, Mario I. Blejer, Alfredo M. Leone, and Gerd Schwartz. Inflation Targeting in the Context of IMF-Supported Adjustment Programs 313
Rogoff, Kenneth, and Jeromin Zettelmeyer. Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976–2001 470
Ruge-Murciá, Francisco J. A Prudent Central Banker 456
Sab, Randa, and Stephen C. Smith. Human Capital Convergence: A Joint Estimation Approach 200
Sarno, Lucio, and Mark P. Taylor. Purchasing Power Parity and the Real Exchange Rate 65
Saxena, Sweta Chaman, and Valerie Cerra. What Caused the 1991 Currency Crisis in India? 395
Schwartz, Gerd, Mario I. Blejer, Alfredo M. Leone, and Pau Rabanal. Inflation Targeting in the Context of IMF-Supported Adjustment Programs 313
Sløk, Torsten. Money Demand in Mongolia: A Panel Data Analysis 128
Smith, Stephen C, and Randa Sab. Human Capital Convergence: A Joint Estimation Approach 200
Taylor, Mark P., and Lucio Sarno. Purchasing Power Parity and the Real Exchange Rate 65
Zanforlin, Luisa, and Alberto Chong. Technology and Epidemics 426
Zettelmeyer, Jeromin, and Kenneth Rogoff. Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976–2001 470
Titles
Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976–2001. By Kenneth Rogoff and Jeromin Zettelmeyer 470
Centripetal Forces in China’s Economic Takeoff. By Anuradha Dayal-Gulati and Aasim M. Husain 364
Comparing Projections and Outcomes of IMF-Supported Programs. By Alberto Musso and Steven Phillips 22
Copycats and Common Swings: The Impact of the Use of Forecasts in Information Sets. By Giampiero M. Gallo, Clive W.J. Granger, and Yongil Jeon 4
The Distribution of Fixed Capital in the Multinational Firm. By Alexander Lehmann 136
Explaining Russia’s Output Collapse. By Irina Dolinskaya 155
Further Cross-Country Evidence on the Accuracy of the Private Sector’s Output Forecasts. By Grace Juhn and Prakash Loungani 49
Human Capital Convergence: A Joint Estimation Approach. By Randa Sab and Stephen C. Smith 200
The Impact of Banking Crises on Money Demand and Price Stability. By Maria Soledad Martinez Peria 267
Inflation Targeting in the Context of IMF-Supported Adjustment Programs. By Mario I. Blejer, Alfredo M. Leone, Pau Rabanal, and Gerd Schwartz 313
The Inverted Fisher Hypothesis: Inflation Forecastability and Asset Substitution. By Woon Gyu Choi 212
The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability. By Paul Cashin and C. John McDermott 175
Money Demand in Mongolia: A Panel Data Analysis. By Torsten Sløk 128
The Optimal Subsidy to Private Transfers Under Moral Hazard. By Ralph Chami and Connel Fullenkamp 242
A Prudent Central Banker. By Francisco J. Ruge-Murciá 456
Purchasing Power Parity and the Real Exchange Rate. By Lucio Sarno and Mark P. Taylor 65
Symposium on Forecasting Performance: An Introduction. By Francis X. Diebold 1
Tax Policy, the Macroeconomy, and Intergenerational Distribution. By Ben J. Heijdra and Jenny E. Ligthart 106
Technology and Epidemics. By Alberto Chong and Luisa Zanforlin 426
Uncovered Interest Parity in Crisis. By Robert P. Flood and Andrew K. Rose 252
Wage Inequality in the United Kingdom, 1975–99. By Eswar S. Prasad 339
What Caused the 1991 Currency Crisis in India? By Valerie Cerra and Sweta Chaman Saxena 395
Subjects
To facilitate electronic storage and retrieval of bibliographic data, IMF Staff Papers has adopted the subject classification scheme of the Journal of Economic Literature (Nashville, Tennessee).
B METHODOLOGY AND HISTORY OF ECONOMIC THOUGHT
B2 History of Economic Thought Since 1925
B29 Other
Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976–2001. By Kenneth Rogoff and Jeromin Zettelmeyer 470
B3 History of Thought: Individuals
Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976–2001. By Kenneth Rogoff and Jeromin Zettelmeyer 470
C MATHEMATICAL AND QUANTITATIVE METHODS
C2 Econometric Models: Single Equation Models
C22 Time-Series Models
The Impact of Banking Crises on Money Demand and Price Stability. By Maria Soledad Martinez Peria 267
C5 Econometric Modeling
Comparing Projections and Outcomes of IMF-Supported Programs. By Alberto Musso and Steven Phillips 22
Copycats and Common Swings: The Impact of the Use of Forecasts in Information Sets. By Giampiero M. Gallo, Clive W.J. Granger, and Yongil Jeon 4
Further Cross-Country Evidence on the Accuracy of the Private Sector’s Output Forecasts. By Grace Juhn and Prakash Loungani 49
C51 Model Construction and Estimation
The Inverted Fisher Hypothesis: Inflation Forecastability and Asset Substitution. By Woon Gyu Choi 212
D MICROECONOMICS
D6 Economic Welfare
D60 General
Tax Policy, the Macroeconomy, and Intergenerational Distribution. By Ben J. Heijdra and Jenny E. Ligthart 106
D64 Altruism
The Optimal Subsidy to Private Transfers Under Moral Hazard. By Ralph Chami and Connel Fullenkamp 242
D8 Information and Uncertainty
Comparing Projections and Outcomes of IMF-Supported Programs. By Alberto Musso and Steven Phillips 242
Copycats and Common Swings: The Impact of the Use of Forecasts in Information Sets. By Giampiero M. Gallo, Clive W.J. Granger, and Yongil Jeon 4
Further Cross-Country Evidence on the Accuracy of the Private Sector’s Output Forecasts. By Grace Juhn and Prakash Loungani 49
D81 Criteria for Decision-Making under Risk and Uncertainty
The Distribution of Fixed Capital in the Multinational Firm. By Alexander Lehmann 136
D82 Asymetric and Private Information
The Optimal Subsidy to Private Transfers Under Moral Hazard. By Ralph Chami and Connel Fullenkamp 242
E MACROECONOMICS AND MONETARY ECONOMICS
E1 General Aggregative Models
E17 Forecasting and Simulation
Inflation Targeting in the Context of IMF-Supported Adjustment Programs. By Mario I. Blejer, Alfredo M. Leone, Pau Rabanal, and Gerd Schwartz 313
E2 Consumption, Saving, Production, Employment, and Investment
Explaining Russia’s Output Collapse. By Irina Dolinskaya 155
E24 Employment; Unemployment; Wages
Wage Inequality in the United Kingdom, 1975–99. By Eswar S. Prasad 339
E3 Prices, Business Fluctuations, and Cycles
Comparing Projections and Outcomes of IMF-Supported Programs. By Alberto Musso and Steven Phillips 22
Copycats and Common Swings: The Impact of the Use of Forecasts in Information Sets. By Giampiero M. Gallo, Clive W.J. Granger, and Yongil Jeon 4
Further Cross-Country Evidence on the Accuracy of the Private Sector’s Output Forecasts. By Grace Juhn and Prakash Loungani 49
E31 Price Level; Inflation; Deflation
The Impact of Banking Crises on Money Demand and Price Stability. By Maria Soledad Martinez Peria 267
Inflation Targeting in the Context of IMF-Supported Adjustment Programs. By Mario I. Blejer, Alfredo M. Leone, Pau Rabanal, and Gerd Schwartz 313
Money Demand in Mongolia: A Panel Data Analysis. By Torsten Sløk 128
E32 Business Fluctuations; Cycles
The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability. By Paul Cashin and C. John McDermott 175
E4 Money and Interest Rates
E41 Demand for Money
The Impact of Banking Crises on Money Demand and Price Stability. By Maria Soledad Martinez Peria 267
Money Demand in Mongolia: A Panel Data Analysis. By Torsten Sløk 128
E43 Determination of Interest Rates; Term Structure of Interest Rates
The Inverted Fisher Hypothesis: Inflation Forecastability and Asset Substitution. By Woon Gyu Choi 212
E5 Monetary Policy, Central Banking, and the Supply of Money and Credit
E52 Monetary Policy (Targets, Instruments, and Effects)
Inflation Targeting in the Context of IMF-Supported Adjustment Programs. By Mario I. Blejer, Alfredo M. Leone, Pau Rabanal, and Gerd Schwartz 313
E58 Central Banks and Their Policies
A Prudent Central Banker. By Francisco J. Ruge-Murciá 456
E6 Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook
E61 Policy Objectives; Policy Designs and Consistency; Policy Coordination
A Prudent Central Banker. By Francisco J. Ruge-Murciá 456
F INTERNATIONAL ECONOMICS
F02 International Economic Order; Economic Integration: General
Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976–2001. By Kenneth Rogoff and Jeromin Zettelmeyer 470
F2 International Factor Movements and International Business
F21 International Investment; Long-term Capital Movements
The Distribution of Fixed Capital in the Multinational Firm. By Alexander Lehmann 136
F3 International Finance
F31 Foreign Exchange
Purchasing Power Parity and the Real Exchange Rate. By Lucio Sarno and Mark P. Taylor 65
What Caused the 1991 Currency Crisis in India? By Valerie Cerra and Sweta Chaman Saxena 395
F32 Current Account Adjustment; Short-term Capital Movements
Uncovered Interest Parity in Crisis. By Robert P. Flood and Andrew K. Rose 252
What Caused the 1991 Currency Crisis in India? By Valerie Cerra and Sweta Chaman Saxena 395
F4 Macroeconomic Aspects of International Trade and Finance
F47 Forecasting and Simulation
What Caused the 1991 Currency Crisis in India? By Valerie Cerra and Sweta Chaman Saxena 395
G FINANCIAL ECONOMICS
G1 General Financial Markets
G15 International Financial Markets
Uncovered Interest Parity in Crisis. By Robert P. Flood and Andrew K. Rose 252
H PUBLIC ECONOMICS
H2 Taxation and Subsidies
H21 Efficiency; Optimal Taxation
The Optimal Subsidy to Private Transfers Under Moral Hazard. By Ralph Chami and Connel Fullenkamp 242
H23 Externalities; Redistributive Effects
Tax Policy, the Macroeconomy, and Intergenerational Distribution. By Ben J. Heijdra and Jenny E. Ligthart 106
H6 National Budget, Deficit, and Debt
H63 Debt; Debt Management
Tax Policy, the Macroeconomy, and Intergenerational Distribution. By Ben J. Heijdra and Jenny E. Ligthart 106
I HEALTH, EDUCATION, AND WELFARE
I1 Health
I19 Other
Human Capital Convergence: A Joint Estimation Approach. By Randa Sab and Stephen C. Smith 200
J LABOR AND DEMOGRAPHIC ECONOMICS
J2 Time Allocation, Work Behavior, and Employment Determination
J24 Human Capital Formation; Occupational Choice; Labor Productivity
Human Capital Convergence: A Joint Estimation Approach. By Randa Sab and Stephen C. Smith 200
J3 Wages, Compensation, and Labor Costs
J31 Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
Wage Inequality in the United Kingdom, 1975–99. By Eswar S. Prasad 339
O ECONOMIC DEVELOPMENT, TECHNOLOGICAL CHANGE, AND GROWTH
O1 Economic Development
Technology and Epidemics. By Alberto Chong and Luisa Zanforlin 426
O11 Macroeconomic Analyses of Economic Development
Centripetal Forces in China’s Economic Takeoff. By Anuradha Dayal-Gulati and Aasim M. Husain 364
O15 Human Resources; Income Distribution; Migration
Human Capital Convergence: A Joint Estimation Approach. By Randa Sab and Stephen C. Smith 200
O18 Regional, Urban, and Rural Analyses
Centripetal Forces in China’s Economic Takeoff. By Anuradha Dayal-Gulati and Aasim M. Husain 364
O3 Technological Change
O39 Other
Technology and Epidemics. By Alberto Chong and Luisa Zanforlin 426
O4 Economic Growth and Aggregate Productivity
Centripetal Forces in China’s Economic Takeoff. By Anuradha Dayal-Gulati and Aasim M. Husain 364
Explaining Russia’s Output Collapse. By Irina Dolinskaya 155
O40 General
Human Capital Convergence: A Joint Estimation Approach. By Randa Sab and Stephen C. Smith 200
Technology and Epidemics. By Alberto Chong and Luisa Zanforlin 426
O5 Economywide Country Studies
O53 Asia including Middle East
Money Demand in Mongolia: A Panel Data Analysis. By Torsten Sløk 128
P ECONOMIC SYSTEMS
P2 Socialist Systems
Explaining Russia’s Output Collapse. By Irina Dolinskaya 155
P24 Income Measurement and Growth
Money Demand in Mongolia: A Panel Data Analysis. By Torsten Sløk 128
Q AGRICULTURAL AND NATURAL RESOURCE ECONOMICS
Q1 Agriculture
Q11 Aggregate Supply and Demand Analysis; Prices
The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability. By Paul Cashin and C. John McDermott 175
In statistical matter throughout this issue,
dots (…) indicate that the data are not available;
a dash (—) indicates that the figure is zero or less than half the final digit shown, or that the item does not exist;
a single dot (.) indicates decimals;
a comma (,) separates thousands and millions;
“billion” means a thousand million; and “trillion” means a thousand billion;
a short dash (–) is used between years or months (for example, 1998–99 or January-June) to indicate a total of the years or months inclusive of the beginning and ending years or months;
a slash (/) is used between years (for example, 1998/99) to indicate a fiscal year or a crop year; and
components of tables may not add to totals shown because of rounding.
The term “country,” as used in this publication, may not refer to a territorial entity that is a state as understood by international law and practice; the term may also cover some territorial entities that are not states but for which statistical data are maintained and provided internationally on a separate and independent basis.
Design: Luisa Menjivar-Macdonald and Sanaa Elaroussi
New from International Monetary Fund
The Baltic Countries: Medium-Term Fiscal Issues Related to EU and NATO Accession
by Johannes Mueller, Christian Beddies, Robert Burgess, Vitali Kramarenko, and Joannes Mongardini
Ten years after regaining independence, the Baltic countries—Estonia, Latvia, and Lithuania—are expected to be invited to join the European Union (EU) and NATO in 2004. This paper provides a macroeconomic perspective on the Baltics’ remarkable economic success to date and of the fiscal challenges that the Baltics face in joining the EU and NATO. The authors offer guidance by deriving some principles on the appropriate medium-term fiscal stance for the Baltics based on theory and empirical evidence.
No. 213. © 2002. 52 pp. $20.00 (academic rate: $17.50) ISBN: 1-58906-104-7. Stock #S213EA
Financial Soundness Indicators: Analytical Aspects and Country Practices
by V. Sundararajan, Charles Enoch, Armida San José, Paul Hilbers, Russell Krueger, Marina Moretti, and Graham Slack
The financial turmoil of the late 1990s prompted a broad search for tools and techniques for detecting and preventing financial crises, and more recent episodes of instability have highlighted the importance of continuous monitoring of financial systems as a tool for preventing crises. This paper looks at the development of measures of financial sector soundness and of methods to analyze them. The authors propose two sets of financial soundness indicators that are considered useful for periodic monitoring, and for compilation and dissemination efforts by national authorities.
No. 212. © 2002. 111 pp. $20.00 (academic rate: $17.50) ISBN: 1-58906-086-5. Stock #S212EA
Capital Account Liberalization and Financial Sector Stability
by a staff team led by Shogo Ishii and Karl Habermeier
Capital account liberalization is a complex process and its success requires proper sequencing and coordination with macroeconomic and other polices—particularly structural policies to strengthen the domestic financial system. This paper analyzes the linkages between capital account liberalization and other policies influencing financial sector stability. Drawing on country experiences, it develops an operational framework for sequencing and coordinating capital account liberalization with other policies aimed at maintaining financial sector stability.
No. 211. © 2002. 94 pp. $20.00 (academic rate: $17.50) ISBN: 1-58906-085-7. Stock #S211EA
IMF-Supported Programs in Capital Account Crises
by Atish Ghosh, Timothy Lane, Marianne Schulze-Ghattas, Aleš Bulíř, Javier Hamann, and Alex Mourmouras
This paper reviews the design of and experience with IMF-supported programs formulated in response to capital account crises in the 1990s, focusing on the experiences of eight countries: Turkey (1994), Mexico (1995), Argentina (1995), Thailand (1997), Indonesia (1997), Korea (1997), the Philippines (1997), and Brazil (1998).
No. 210. © 2002. 94 pp. $20.00 (academic rate: $17.50) ISBN: 1-58906-082-2. Stock #S210EA
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